The current state of the national economy continues to affect the remodeling industry, according to the latest National Association of Home Builders Remodeling Market Index (RMI). The index dropped to 41.7 in the third quarter from 43.9 in the second quarter, after having reached a four-year high of 46.5 in the first quarter of the year.
Many remodelers report that although home owners are interested in pursuing remodeling, they are extremely slow in committing right now, and many have adopted a ‘wait-and-see’ attitude. Before remodeling picks up again, consumers will need access to less restrictive lending and more confidence in their economic future.
The RMI has two components, measuring current and future conditions. Both declined in the third quarter: the current component down to 43.0 from 44.8 in Q211 and the future one down to 40.4 from 43.0 in Q211.
The RMI is based on a quarterly survey of professional remodelers, whose answers to a series of questions were assigned numerical values to calculate two separate indices. The first index gauges current market conditions and is based on remodelers’ reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings. The second index summarizes indicators of future remodeling activity and is based on remodelers’ responses to questions about calls for bids, amount of work committed for next three months, job backlogs and appointments for proposals.